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Oracle Corporation, headquartered in Redwood Shores, CA, is an enterprise software company. The company develops, manufactures, markets, distributes and services database and middleware software, as well as applications software that help organizations to manage their businesses.

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DailyVista

Oracle jumps into Linux support arena

The Story

Database giant Oracle will aggressively enter the Linux operating system support market, according to The San Jose Mercury News.

Chief Executive Larry Ellison made the surprise announcement on Wednesday during Oracle’s annual meeting. He declared that Oracle would offer support for the free, open-source alternative to the Windows operating system at half the cost of Red Hat, the largest commercial provider of Linux.

The announcement sent shock waves through the industry, and Red Hat’s stock took a 20 percent hit.

The Redwood Shores, Calif.-based Oracle brings in about $12 billion per year selling database and other enterprise software to corporations. A move into Linux will greatly bolster the free operating system as a viable alternative to Microsoft’s corporate operating systems.

The Research

Oracle calls the new product Unbreakable Linux. The service will mirror that offered by Red Hat. Oracle will install the Linux operating system onto corporate computers and then charge a fee per computer to offer support.

Although most IT chiefs complain about using Microsoft operating systems, the company does offer a robust support system to help with computer snafus. Red Hat and now Oracle offer this kind of support for Linux.

Unbreakable Linux got off to a nice start. Several large corporations including Dell, Hewlett Packard, IBM, Bearing Point, EMC and NetApp publicly committed to using the Unbreakable Linux service. The news was covered widely by the business press.

The company will target both existing Oracle customers and new users with the service. The company is actively targeting Red Hat clients, noting that it only takes one minute to make the switch.

"Oracle's Unbreakable Linux program is available to all Linux users for as low as $99 per system per year," said Oracle President Charles Phillips. "You do not have to be a user of Oracle software to qualify. This is all about broadening the success of Linux.”

We called Oracle and learned that Oracle's Chief Corporate Architect Edward Screven is the top decision maker for the Unbreakable Linux product.

According to The List database, Oracle’s creative duties are handled in-house. Starcom International handles media buying for the company, and Newton, Conn.-based Leverage Marketing handles some B-to-B marketing for the company.

According to Nielsen Media-Plus, Oracle spent about $20 million on measured advertising in 2005. The company spent the most money, $7 million, on national magazine buys. Oracle also spent $6 million on newspaper ads and another $6 million on cable TV purchases.

The Direction

Oracle's jumping into the Linux market is pretty big. Microsoft may even start to take the threat of Linux seriously. As for marketing the product, Oracle will likely start with its own customers. However, Phillips made it clear that the company’s targeting all business users. Agencies should drum up some ideas on introducing wary corporate clients to the benefits of Linux. The price should be a good conversation starter.

It's got to be a pretty gloomy day over at Red Hat. The company was already struggling to grow (DailyVista article), so this announcement can’t be welcomed in Raleigh. Agencies with ideas on helping Red Hat respond to this encroachment should approach executives with the company. Red Hat could keep prices high and brand itself as the Mercedes of the Linux market.